7 Stocks with High Dividend Yields and One to Buy Now

This list of stocks with high dividend yields ranks seven companies trading on U.S. exchanges by largest yield as of June 6, 2017. After the list, we'll show you the best dividend stock to own in 2017, too...

Dividend Stock Share Price 2017 Return Dividend Yield (as of June 6)
SandRidge Mississippian Trust II (NYSE: SDR) $1. 43 +1.42 23.99%
SandRidge Mississippian Trust I (NYSE: SDT) $1.45 +11.54 19.23%
Cornerstone Strategic Value Fund Inc. (NYSEMKT: CLM) $17.01 +12.16 16.40%
Cornerstone Total Return Fund Inc. (NYSEMKT: CRF) $16.88 +12.01 16.27%
Oxford Lane Capital Corp. (Nasdaq: OXLC) $10.94 +0.43 14.63%
Chesapeake Granite Wash Trust (NYSE: CHKR) $2.40 +0.05 14.62%
StoneMor Partners LP (NYSE: STON) $9.18 +0.27 14.38%

Most of the stocks on this dividend list are energy-related trusts, which provide profits from gas and oil wells directly to shareholders. This arrangement can shield the trusts from certain corporate income taxes.

However, we don't recommend buying shares of the companies listed above. The yields make these stocks tempting to own when compared to the 1.91% dividend yield of the S&P 500, but the quarterly dividends can fluctuate wildly because of volatile energy prices. When gas and oil prices are low and production decreases or wells dry up, dividends are reduced.

For example, the SandRidge dividend was cut from $0.57 to $0.37 when oil prices dropped 47.4% between February 2014 and February 2015.

That's a decrease of 35.1% in dividend payouts in just one year.

You see, the best dividend stocks to own are ones that outperform the markets and provide stable dividend payouts.

And Money Morning Director of Technology & Venture Capital Research Michael A. Robinson recommends one dividend stock that does both.

Must Read: The 7 Best Dividend Stocks to Buy in 2017

It's a dividend aristocrat that has increased its dividend payout for 25 consecutive years, and Robinson believes it's currently undervalued because analysts aren't evaluating the stock accurately.

Here's one of the best dividend stocks to own right now...

Instead of High Dividend Yields, Focus on This Stable Profit Generator

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Johnson & Johnson (NYSE: JNJ) is a holding company that operates in three segments: consumer, pharmaceutical, and medical devices. Its stock is our top dividend stock pick because the company has raised its dividend payment for 25 straight years, it's a well-managed company, and it has the potential to grow its share price.

Its most well-known brands include:

  • Band-Aid
  • Benadryl
  • Bengay
  • First-Aid
  • Listerine
  • Motrin
  • Nicoderm
  • Pepcid AC
  • Visine

But because Johnson & Johnson operates in different business sectors, analysts have a difficult time evaluating the stock.

"This is precisely the dilemma that analysts find themselves in when looking at the stock (and markets when pricing the shares)," Robinson said on May 18. "'Is it a consumer goods company? Is it a pharmaceutical company?' The truth is, it's both, and we can take advantage of their confusion on the subject."

And as analysts figure out how to judge JNJ, we're focusing on a major announcement.

On May 17, the company announced it was seeking regulatory approval for 10 drugs. Over the next four years, these blockbuster drugs could generate $1 billion in sales a year.

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Like Robinson, financial firm Cowen & Co. is bullish on JNJ stock. Cowen & Co. has a one-year price target of $143 for JNJ stock. From the closing price of $130.36 on June 5, that's a potential profit of 9.69% over the next 12 months.

And so far in 2017, JNJ has provided shareholders with market-beating gains of 13.61%. The Dow has only climbed 7%.

Best of all, Johnson & Johnson pays a dividend of $0.84 per share, which is a yield of 2.58%.

JNJ first paid a dividend in 1972, and its $0.05 dividend payment in 1992 has increased to $0.84 per share today. That's a 1,580% increase from this dividend aristocrat.

"Buy Johnson & Johnson at market today and make it a foundational holding," Robinson said.

The Bottom Line: Energy-related trusts with dividend yields as high as 23% are tempting to own. However, the payout amounts are volatile because of rapidly changing energy prices. The better move is to own a growing stock that has consistently increased its dividend, like Johnson & Johnson.

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